Oct 8, 2021 - News

Philly considers capping food delivery fees

Illustration of a food delivery bag, with a dollar stapled to it instead of a receipt.

Illustration: Brendan Lynch/Axios

Philly is considering making permanent a 15% cap on food delivery fees that services like Grubhub, Uber Eats and DoorDash charge restaurants.

Why it matters: The city's food industry was decimated by the pandemic, and recovering restaurants are facing thin profit margins. Many still rely on takeout orders and outdoor dining to stay afloat.

  • These higher fees could get passed on to customers.

Flashback: The city put in place a 15% fee cap on what delivery companies can charge restaurants and others during the height of the pandemic last year.

  • But the current law only applies during a declared public health emergency (Philly's is still in effect), plus an additional 90 days.

What they're saying: The proposal, introduced by City Councilmember Cherelle Parker, also has the backing of the Pennsylvania Restaurant & Lodging Association, an industry trade group.

  • Ben Fileccia, director of operations and strategy at PRLA, expected fees to skyrocket without a cap.
  • "Third-party delivery apps have been pretty predatory toward restaurants — even pre-COVID."

Judy Ni, owner of the Taiwanese restaurant baology, backed a cap, saying it would scuttle hidden fees from delivery service providers.

  • "We just want a reliable, predictable contract. We don't want surprises," she said.
  • Ni added that third-party delivery services pressure restaurant owners not to raise prices to make up for their fees.

The other side: Grubhub spokesperson Grant Klinzman said in an email that a permanent fee cap would be "unconstitutional and hurt everyday people and restaurants across Philadelphia."

  • "Price controls drive up costs for consumers, which reduce the number of orders restaurants receive and the work available for delivery workers," he said.

Of note: A legislative committee has yet to schedule a hearing on the proposal.


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